Dr. Reinhold Mitterlehner: Austria on the rise as a business location

Date: August 19, 2012

in: Uncategorized

Despite three factors putting it in a difficult starting position – a high export quota, a close network with Eastern European countries and countless supply companies for the struggling automobile sector – Austria has come through the international financial and economic crisis of 2008 and 2009 better than many other European countries. Thanks to our efficient companies and the introduction of appropriate measures in economic stimulus programmes, we were able to manage the crisis well. We secured company financing through low-interest loans and guarantees, accelerated domestic consumption through a tax reform and created favourable conditions using measures such as short-time working. This allowed companies to keep valuable skilled workers.

All of these measures have paid off in the long run and have had a positive effect on competitiveness. These well implemented structural changes have made Austria today more crisis-resistant as a business location, able to play to its traditional ad­­van­­tages even more. These include a modern infrastructure, state-of-the-art technology, a well-trained and motivated workforce and optimum access to the important markets in Eastern and South­­eastern Europe. Austria offers political, social and economic stability paired with the highest quality of living.

Despite these already excellent conditions, we must continue to develop and constantly work on improving the necessary structures. Only this will allow us to continue to improve our international compe­titiveness and remain an attractive location for companies, which in turn create added value and jobs in Austria. We are implementing a series of measures to achieve this: With its „Triple-l Strategy“, the Federal Ministry of Economy is in­­crea­sing innovation potential, supporting in­­vestments and promoting internatio­nal­isation. At the same time, we are driving forward the changeover to a sustainable and efficient energy system. As a result of the targeted promotion of thermal redevelopment, energy is used more sparingly, while the new Green Elec­­tricity Act is driving a significant increase in the use of renewable energy, thereby opening new economic opportunities. Another key issue is the development of policies regarding families. We support families of all shapes and sizes and are making it easier to combine family life with work through a mixture of comprehensive monetary and targeted non-cash benefits.

Success through innovation. Competitive technologies and products are of vital im­­­­por­­tance for an efficient and competitive Austria. We are therefore supporting the development and market introduction of innovations even more than in the past. Through the Austrian Research Promotion Agency (FFG), we offer an additional inno­­­­vation cheque for 10,000 euros in order to motivate even more small and medium-sized companies to be­­come involved in research and development. This is in addition to a new technology cheque for 1,000 euros for innovative entrepreneurs. Funding for creativity is also being expanded, with a creative cheque for 5,000 euros for im­ple­­menting innovations on the market. Our goal is for Austria to become an „innovation leader“ among EU countries and to increase the research quota by one percentage point to 3.76 by 2020. Part of this strategy has already been implemented through the in­­crease of tax-deductible research grants from eight to ten per cent.

Investment will also continue to be encouraged. The Federal Ministry of Economy sup­­­­­­ports companies primarily through the eco­­nomic development bank Austria Wirt­­schafts­­service (aws) with grants, low-interest ERP loans and guarantees. In 2011 alone, we will provide grants of up to one billion euros, 98 per cent of which will go to small and medium-sized companies (SME). This results in a total annual invest­­­­ment volume of over 2.5 billion euros, through which around 8,000 new jobs can be created and 70,000 more secured in Austria.

New products for new markets. For decades, exports have been a guarantee of prosperity and a driving force behind growth in Austria. Every second euro is earned through exports. As part of a reorientation of our internationalisation offensive, we want to diversify in terms of both our target markets and our products, in order to benefit to an even greater extent from the tremendous growth in countries such as China, India and Brazil and the region around the Black Sea. The share of exports to non-European markets is to increase from currently 17 per cent to 30 per cent by 2020. Diver­­sification also creates new opportunities for products. Austrian companies active in the new future markets with environmentally friendly innovations, high-tech products and knowledge-based services – such as IT and online services or high-quality planning services – can benefit tremendously from this. Existing strategies such as participation in important trade events and research cooperation are supported as part of the internationa­­lisation offensive, as are the new export cheques especially directed at small and medium-sized companies. We are thereby helping companies take their first steps in exports, increase their exploitation of distant markets and market their technological innovations abroad.

More green electricity and energy efficiency. Given the nuclear disaster in Fuku­shima, the Green Electricity Act, which took effect in July 2011, is setting the right focus. We are freeing up nearly twelve billion euros in investments in sustainable technologies and strengthening the com­­petitiveness of the green electricity sector. At the same time, the Act paves the way for independence from nuclear power and turns us into an electricity-exporting nation once again. On balance, Austria benefits through greater added value, jobs and security through energy independence. With the Green Elec­tricity Act, we have taken a decisive step which allows us to expand our leading position in Europe and provide our children with a clean energy future. Already, nearly 70 per cent of Austria’s energy generation comes from water, wind, sun, biomass or biogas. This Act makes it possible to in­­crease the share of renewable energy sources to nearly 85 per cent by 2020.

Research and development are important economic factors in Austria thanks to excellent education and training standards

On the basis of Austria’s energy strategy, we want to create not only a sustained, but also an efficient energy system. Because the cheapest and most environmentally friendly energy is still energy which is not used at all. To this end, we are using a wide range of measures, with which we hope to reduce and stabilise gross energy consump­tion to 2005 levels by 2020. Im­­por­­tant steps in this direction include the fund­­ing campaign for thermic redevelopment, launched in 2011, whose financing is se­­cured until 2014. The Energy Effi­ciency Act, sched­­uled to take effect in 2012, will provide more stimulus for the economical use of energy. At the same time, it is of vital importance that public awareness of the advantages of conserving energy be increased.

New choices in tourism. The tourism sector is also an important pillar of the Austrian economy. Thanks to the continually im­­proved ranges offered by the companies and a further optimised infrastructure, the summer season also brought new records in the number of guests and positive figures for overnight stays. The focussed marketing strategy of the Austrian tourism agency has played a crucial role in this. In all foreign markets, this tourism straegy for Austria concentrates on the most important and uniquely Austrian features of the Alps, river Danube and lakes, as well as cities and cultural highlights.

Strong families for a strong economy. We also want to further improve the com­­pat­ibility of family and work. The main focus here is on three pillars – financial support for families through child care and family allowances; the expansion of high-quality, needs-based and affordable child care; and promoting a family-friendly economy. In family-oriented companies, motivation in­­creases, sickness rates drop and re-entry quotas after maternity leave increase. Im­­proving family-friendliness there­­fore also provides sustainable benefits for Austria.

The author is the Federal Minister for Eco­­nomy, Family and Youth in the Republic of Austria. He completed his doctoral studies in law in 1980, earning the title Dr. jur. From 1992 to 2000, Mitterlehner was the general secretary of the Österreichischer Wirtschaftsbund, before taking up the post of deputy general secretary of the Austrian Federal Chamber of Commerce from 2000 to 2008.